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Washington Wants to Own Detroit   December 7th, 2008
The new price for government bailout: New Management       


More observations...

Over the weekend it seems there's been a concerted effort asking for the heads of the Big Three management team in exchange for bailout money. Washington seems ready to dole out $15 billion but they're starting to float the idea of demanding that the management be entirely replaced.

First there was this one: http://www.foxnews.com/politics/2008/12/07/dodd-auto-executive-replaced-exchange-bailout

U.S. Senate Banking Committee Chairman Chris Dodd called on a top auto executive to resign in exchange for bailout money from the federal government.

Then, later Sunday, there was this article: http://www.cbsnews.com/stories/2008/12/07/ftn/main4652888.shtml

As future shareholders of General Motors (by way of Congress' proposed infusion of taxpayer dollars to Detroit), Americans should not allow the management that "drove this company into a ditch" to stay on, hoping that the same management will be able to drive it back out...

Friedman also said blame must be shared by lawmakers who protected the Big Three's interests over the years - "protecting them to death," in a way - by blocking pressures to build more fuel-efficient, safer cars, and thus making them less competitive on the world market...

Ironically, Friedman said, Detroit's proficiency at lobbying was against their long-term best interests, as when they opposed then-First Lady Hillary Clinton's national health care program. Now the automakers are burdened with the costs of health coverage for their workers and retirees.

"Now they tell us, 'Oh, it's terrible, we've got these health care costs, woe is me!' But were they out there campaigning for a national health care plan that they would have been the biggest beneficiaries of? No, they were brain-dead...

"It's a travesty that the American people are in this terrible choice today," he said. But he is not in favor of simply letting the companies go under. "If we are going to save them, then I want new management and I want to see a real plan for their survival."

There is so much wrong with the above it's amazing. The government hasn't "protected to death" the interests of the Big Three; they've been mandating the types of cars that would be built due to their faulty mileage requirements. When they mandate that cars meet a specific efficiency requirement but trucks aren't subject to those requirements, and Americans want big cars, you're obviously going to find the market flooded with SUVs that are classified as trucks and thus not subject to the car fleet mileage requirements. It's not the Big Three's fault that the SUV market blossomed: It was a combination of the public's demand for bigger vehicles and the government's requirements that basically said that to be exempt from car mileage requirements, the vehicles have to be really big.

And another flaw of the auto industry is in not supporting socialized medicine? That was a "brain dead" position and is part of why they're failing now?

It appears the liberals are launching a concerted effort to replace the management of the Big Three with those that will build the cars that liberals want, and with management that will bow down to liberal socialized health proposals. Apparently that is the price of a bailout of the Big Three.

It's bad enough that the government is bailing out (or considering bailing out) so many private industries. But for them to literally be conditioning that money on allowing liberal government central planners to dictate policy in the industry just takes a bad idea and makes it worse.

Either it makes financial sense to bailout the auto industry or it doesn't. But a wholesale abdication of private industry to the dictates of government does not make sense. Central government planning does not work and a lot of the industry's problems were already caused by government meddling.

I'd rather see the Big Three go bankrupt than see them slaves to government money and management.

Update: After posting the above comment, a new article was published in which Obama apparently has joined the crowd asking for management to step down. http://money.cnn.com/2008/12/07/autos/obama_dodd_auto_bailout.ap/index.htm

In an appearance on NBC's "Meet the Press" and later at a news conference, Obama at one point suggested some executives should lose their jobs.

It's clear the liberal talking points on this issue were distributed before the weekend and key liberals have been taking to the airwaves this weekend with the goal of eliminating management at the Big Three. And Obama is on board.

At least it should be clear that taking money from the government comes with a price. I hope the Big Three resists this disgusting effort of Democratic politicians to further intrude in private businesses. It's becoming more and more clear that bailing out the auto industry isn't being contemplated because it's in the best interest of the economy but rather because liberal politicians want to further dictate and control how Detroit runs its businesses. And government meddling is a large part of why Detroit is facing the problems it's facing.

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